15-08-26 Samsung Motion for JMOL or Stay

8/20/2019 15-08-26 Samsung Motion for JMOL or Stay

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Case No. 11-cv-01846-LHK

SAMSUNG’S MOTION FOR ENTRY OF JUDGMENT OF INVALIDITY ON ‘915 PATENT

QUINN EMANUEL URQUHART & SULLIVAN, LLPCharles K. Verhoeven (Cal. Bar No. 170151)[email protected] California Street, 22nd FloorSan Francisco, California 94111Telephone: (415) 875-6600

Facsimile: (415) 875-6700

Kathleen M. Sullivan (Cal. Bar No. 242261)[email protected] P.B. Johnson (Cal. Bar No. 177129)[email protected] F. Maroulis (Cal. Bar No. 202603)[email protected] Twin Dolphin Drive 5th FloorRedwood Shores, California 94065Telephone: (650) 801-5000Facsimile: (650) 801-5100

William C. Price (Cal. Bar No. 108542)[email protected] T. Zeller (Cal. Bar No. 196417)[email protected] S. Figueroa St., 10th FloorLos Angeles, California 90017Telephone: (213) 443-3000Facsimile: (213) 443-3100

Attorneys for SAMSUNG ELECTRONICSCO., LTD., SAMSUNG ELECTRONICSAMERICA, INC. and SAMSUNGTELECOMMUNICATIONS AMERICA, LLC

UNITED STATES DISTRICT COURTNORTHERN DISTRICT OF CALIFORNIA, SAN JOSE DIVISION

APPLE INC., a California corporation,

Plaintiff,

vs.

SAMSUNG ELECTRONICS CO., LTD., a

Korean business entity; SAMSUNGELECTRONICS AMERICA, INC., a NewYork corporation; SAMSUNGTELECOMMUNICATIONS AMERICA,LLC, a Delaware limited liability company,

Defendants.

CASE NO. 11-cv-01846-LHK

SAMSUNG’S NOTICE OF MOTIONAND MOTION FOR ENTRY OFJUDGMENT OF INVALIDITY ON THE’915 PATENT AND TO STAYFURTHER PROCEEDINGS IN LIGHT

OF THE PTAB’S FINAL DECISIONINVALIDATING THE ’915 PATENT

Date: To be set by CourtTime: 1:30 p.m.Place: Courtroom 8, 4th FloorJudge: Hon. Lucy H. Koh

Case5:11-cv-01846-LHK Document3267 Filed08/26/15 Page1 of 25


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-i-Case No. 11-cv-01846-LHK

SAMSUNG’S MOTION FOR ENTRY OF JUDGMENT OF INVALIDITY ON '915 PATENT

TABLE OF CONTENTS

Page

NOTICE OF MOTION AND MOTION .......................................................................................... 1

MEMORANDUM OF POINTS AND AUTHORITIES .................................................................. 1

I. INTRODUCTION ................................................................................................................. 1

II. BACKGROUND ................................................................................................................... 2

A. The District Court And Federal Circuit Proceedings ................................................ 2

B. The United States Patent And Trademark Office Proceedings ................................. 3

III. THE COURT SHOULD ENTER JUDGMENT OF INVALIDITY OF THE ’915PATENT AND VACATE LIABILITY AND DAMAGES ON PRODUCTS FOR

WHICH ’915 INFRINGEMENT DAMAGES WERE AWARDED ................................... 5

A. Judgment Of Invalidity Is Required Based On Collateral Estoppel .......................... 5

1. Final PTO/PTAB Invalidity Decisions Are Entitled To CollateralEstoppel Effect .............................................................................................. 5

2. The PTAB’s Invalidity Ruling Satisfies Each Element Of CollateralEstoppel ......................................................................................................... 7

3. Collateral Estoppel May Be Raised At Any Stage Of TheProceedings ................................................................................................. 11

B.

The Court Should Vacate The Judgment Of Infringement Of The ’915Patent And The Damages Awards For All Products On Which ’915Infringement Damages Were Awarded ................................................................... 12

IV. ALTERNATIVELY, THE COURT SHOULD STAY FURTHER PROCEEDINGSPENDING ANY APPEAL OF THE PTAB’S FINAL DECISIONINVALIDATING THE ’915 PATENT .............................................................................. 13

A. The Orderly Administration Of Justice Warrants A Stay ....................................... 14

1. A Stay Will Avoid Inconsistent Judgments Across Fora ............................ 14

2.

A Stay Will Avoid Inconsistent Judgments Within This Case ................... 15

3. A Stay Will Avoid A Waste Of Resources ................................................. 15

B. A Stay Is Warranted Based On The Stage Of Both Proceedings ............................ 16

C.

A Stay Will Prevent Hardship And Inequity To Samsung ...................................... 18

D. A Stay Will Not Harm Apple .................................................................................. 18

V. CONCLUSION ................................................................................................................... 19



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-ii-Case No. 11-cv-01846-LHK


TABLE OF AUTHORITIES

Page

Cases

AbbVie Deutschland GmbH &Co. v. Janssen Biotech, Inc.,759 F.3d 1285 (Fed. Cir. 2014) ................................................................................................5, 9

ASCII Corp. v. STD Entm’t USA, 844 F.Supp. 1378 (N.D. Cal. 1994) ...........................................................................................13

B&B Hardware, Inc. v. Hargis Industries, Inc.,135 S. Ct. 1293 (2015) .......................................................................................................6, 7, 10

Bausch & Lomb Inc. v. Alcon Labs., Inc.,914 F. Supp. 951 (W.D.N.Y. 1996) ...........................................................................................17

Blonder-Tongue Laboratories, Inc. v. Univ. of Ill. Found.,402 U.S. 313 (1971) .....................................................................................................................5

Broad. Innovation, L.L.C. v. Charter Commc’n, Inc.,No. CIV A03-CV2223ABJBNB , 2006 WL 1897165 (D. Colo. July 11, 2006) ........................18

Brown v. Shimano Am. Corp.,No. CV 88-6565 WJR (BX), 1991 WL 133586 (C.D. Cal. Jan. 29, 1991) ................................18

CMAX, Inc. v. Hall,300 F.2d 265 (9th Cir. 1962) ................................................................................................13, 18

Cardenas v. AmeriCredit Fin. Servs.,No. C 09-04978 SBA, 2011 U.S. Dist. LEXIS 29105 (N.D. Cal. Mar. 7, 2011) ......................15

Coho Licensing LLC v. Glam Media,No. C 14-01576 JSW, 2014 WL 4681699 (N.D. Cal. Sept. 17, 2014) ......................................14

CollegeNET, Inc. v. Applyyourself, Inc.,2008 WL 4793683 (D. Or. Oct. 28, 2008) ...................................................................................8

Dana Corp. v. NOK, Inc.,882 F.2d 505 (Fed. Cir. 1989) ....................................................................................................10

Delphix Corp. v. Actifio, Inc.,

No. 13-CV-04613-BLF, 2014 WL 6068407 (N.D. Cal. Nov. 13, 2014) .............................13, 14

Deposit Bank v. Board of Councilmen of City of Frankfort ,191 U.S. 499 (1903) .....................................................................................................................7

DietGoal Innovations LLC v. Chipotle Mexican Grill, Inc.,70 F. Supp. 3d 808 (E.D. Tex. 2014) ...........................................................................................7

e.Digital Corp. v. Futurewei Techs., Inc.,772 F.3d 723 (Fed. Cir. 2014) ......................................................................................................7



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-iii-Case No. 11-cv-01846-LHK


ePlus, Inc. v. Lawson Software, Inc., 760 F.3d 1350 (Fed. Cir. 2014) ..................................................................................................15

ePlus, Inc. v. Lawson Software, Inc.,

790 F.3d 1307, 1309 (Fed. Cir. 2015) ........................................................................................18

Ethicon, Inc. v. Quigg,849 F.2d 1422 (Fed. Cir. 1988) ..................................................................................................13

Everything For Love.com, Inc. v. Tender Loving Things, Inc., No. CIV 02-2605-PHX-EHC, 2006 WL 2091706 (D. Ariz. Jul. 21, 2006) ...............................17

Evolutionary Intelligence, LLC v. Apple, Inc.,No. C 13-04201 WHA, 2014 WL 93954 (N.D. Cal. Jan. 9, 2014) ............................................14

Flexiteek Americas, Inc. v. PlasTEAK, Inc.,No. 08-60996-CIV, 2010 WL 2976859 (S.D. Fla. July 20, 2010) .......................................17, 18

Fresenius USA, Inc. v. Baxter International, Inc.,721 F.3d 1330 (Fed. Cir. 2013) ............................................................................................11, 15

Galderma Labs Inc. v. Amneal Pharms., LLC ,921 F. Supp. 2d 278 (D. Del. 2012) .............................................................................................8

Hydranautics v. FilmTec Corp.,204 F.3d 880 (9th Cir. 2000) ........................................................................................................7

JuxtaComm-Texas Software LLC v. Lanier Parking Sys. of Va., Inc.,944 F. Supp. 2d 469 (E.D. Va. 2013) ...........................................................................................7

Juxtacomm-Texas Software, LLC v. Lanier Parking Sys. of Va., Inc.,2011 WL 3322554 (E.D. Va. Aug. 2, 2011) ........................................................................14, 16

In re Katz Interactive Call Processing Patent Litig.,2013 WL 3223382 (C.D. Cal. June 12, 2013) ..........................................................................6, 9

Kremer v. Chem. Const. Corp.,456 U.S. 461 (1982) ...................................................................................................................10

Landis v. North American Co.,299 U.S. 248 (1936) .............................................................................................................13, 16

Leyva v. Certified Grocers of Cal., Ltd.,593 F.2d 857 (9th Cir. 1979) ......................................................................................................13

Mendenhall v. Barber-Greene Co.,26 F.3d 1573 (Fed. Cir. 1994) ................................................................................................5, 11

Montana v. United States, 440 U.S. 147 (1979) ...................................................................................................................10

N. River Ins. Co. v. Leffingwell Ag Sales Co.,2011 U.S. Dist. LEXIS 8208 (E.D. Cal. Jan. 27, 2011) .............................................................18



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-iv-Case No. 11-cv-01846-LHK


Nanometrics Inc. v. Nova Measuring Instruments, Ltd.,No. C 06-2252 SBA, 2007 WL 627920 (N.D. Cal. Feb. 26, 2007) ...........................................18

Network Appliance, Inc. v. Sun Microsystems Inc.,No. C-07-06053 EDL, 2010 WL 545855 (N.D. Cal. Feb. 11, 2010) .........................................14

Pharmacia & Upjohn Co. v. Mylan Pharms., Inc.,170 F.3d 1373 (Fed. Cir. 1999) ............................................................................................5, 7, 8

Ruyle v. Continental Oil Co.,44 F.3d 837 (10th Cir. 1994) ........................................................................................................9

SSIH Equipment S.A. v. U.S. Intern. Trade Com’n,718 F.2d 365 (Fed. Cir. 1983) ......................................................................................................7

Standard Havens Prods., Inc. v. Gencor Indus., Inc.,996 F.2d 1236 (Fed. Cir. 1993) ............................................................................................16, 17

Tan v. Integrated Silicon Solutions, Inc.,

2008 WL 2340217 (N.D. Cal. June 5, 2008) ...........................................................................6, 9

Thompson-Hayward Chemical Co. v. Rohm and Haas Co.,745 F.2d 27 (Fed. Cir. 1984) ..................................................................................................5, 10

Tripati v. Henman,857 F.2d 1366 (9th Cir. 1988) ......................................................................................................8

Ultratec, Inc. v. CaptionCall, LLC ,No. 2015-1694, 2015 WL 4528272 (Fed. Cir. June 30, 2015) ..................................................17

Ultratec, Inc. v. Sorenson Commc’ns, Inc.,No. 13-CV-346-BBC, 2015 WL 2248437 (W.D. Wis. May 13, 2015) .....................................17

Verizon Servs. Corp. v. Vonage Holdings Corp.,503 F.3d 1295 (Fed. Cir. 2007) ............................................................................................12, 16

Versa Corp. v. Ag-Bag Int’l Ltd.,No. CV-01-544-HU, 2001 WL 34046241 (D. Or. Sept. 14, 2001) ............................................13

Versata Software Inc. v. Callidus Software, Inc.,771 F.3d 1368 (Fed. Cir. 2014) ..................................................................................................16

Statutes

35 U.S.C. § 102(e) ..............................................................................................................................3

35 U.S.C. § 103(a) ..............................................................................................................................3

35 U.S.C. § 141 ..................................................................................................................................4

35 U.S.C. § 141(b) .............................................................................................................................9

35 U.S.C. § 146 ..................................................................................................................................9



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-v-Case No. 11-cv-01846-LHK


35 U.S.C. §§ 301-307 .........................................................................................................................6

Other Authorities

18 James Wm. Moore, Moore’s Federal Practice § 131.30[2] .........................................................8

Restatement (Second) of Judgments § 13 (1982) ...........................................................................8, 9

Restatement (Second) of Judgments § 83(1) ......................................................................................6



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-1-Case No. 11-cv-01846-LHK


NOTICE OF MOTION AND MOTION

TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:

PLEASE TAKE NOTICE that on October 1, 2015, or a date to be set by the Court,

Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., and Samsung

Telecommunications America, LLC (collectively “Samsung”) shall and hereby do move the Court

for an order entering judgment of invalidity of claim 8 of U.S. Patent No. 7,844,915 (“’915

patent”) based on the Patent Trial and Appeal Board’s (“PTAB”) final decision that such claim is

invalid as anticipated by the Hillis reference and obvious in view of the Nomura and Rubine

references, and vacating all liability and damages judgments related thereto in light of such

invalidation.

Alternatively, Samsung moves the Court for an order staying all proceedings, including

any entry of judgment, based on the PTAB’s finding of invalidity of the ’915 patent.

MEMORANDUM OF POINTS AND AUTHORITIES

I. INTRODUCTION

In December 2014, the PTAB issued a final decision finding that all claims of Apple’s

’915 patent are invalid, including claim 8—the claim tried in this case. This final invalidity

decision has collateral estoppel effect in this action now, and requires this Court to vacate all

liability findings and damages awards relating to the ’915 patent. Apple can appeal the PTAB’s

invalidity determination to the Federal Circuit, and its petition for rehearing before the PTAB is

pending, but the possibility (or pendency) of such appellate or post-decision proceedings does not

undermine the application of collateral estoppel. To the contrary, recent Supreme Court

authority holds that final agency decisions like those of the PTAB are entitled to the same

collateral estoppel effect as a final judgment of a district court, which undoubtedly would be

accorded preclusive effect while post-judgment proceedings are ongoing. Thus, collateral

estoppel requires the entry of judgment for Samsung on the ’915 patent, and vacatur of all

damages judgments relating thereto.

Alternatively, in light of the PTAB’s invalidation of the ’915 patent, the Court at a

minimum should stay further proceedings pending Federal Circuit resolution of any appeal by



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Apple of the PTAB decision or expiration of time for such an appeal. Absent a stay, the Court’s

time and resources would be wasted by undertaking extensive further damages proceedings in

light of the Federal Circuit’s partial reversal while Apple seeks to overturn the PTAB’s final

invalidation of the ’915 patent. The Federal Circuit has recognized that it is “manifestly unjust ”

to allow a plaintiff to recover on a patent that has been invalidated in separate proceedings.

Mendenhall v. Barber-Greene Co., 26 F.3d 1573, 1583 (Fed. Cir. 1994) (italics in original), as

corrected on reh’g (Sept. 14, 1994). To avoid such an injustice, the Court should at a minimum

issue a stay.

Apple thus errs in its letter demand (Dkt. 3264) that the Court enter partial final judgment

now, for that proposed judgment would include damages on products for which ’915 infringement

damages have been awarded after the agency that issued that patent has finally invalidated it.

Any entry of partial final judgment now would also risk inconsistent judgments by this Court, with

’915 infringement damages awarded on some products now but rejected on other similarly-

situated products in later proceedings after ultimate cancellation of the ’915 patent.1 The Court

should stay all proceedings, including as to any entry of any partial final judgment.

For these reasons, Samsung respectfully requests that the Court grant judgment of

invalidity to Samsung on claim 8 of the ’915 patent and vacate all damages judgments relating

thereto, or at a minimum stay further proceedings.

II. BACKGROUND

A. The District Court And Federal Circuit Proceedings

Apple filed its complaint against Samsung in April 2011, and the case went to trial in

August 2012. The jury found that multiple Samsung products diluted Apple’s registered and

unregistered trade dress, infringed three Apple design patents, and infringed three Apple utility

patents, including claim 8 of the ’915 patent. During trial, Samsung argued that the Nomura

reference anticipated claim 8 of the ’915 patent. The jury disagreed. Following trial, Samsung

1 Apple’s request for entry of partial final judgment is misguided for other reasons as wellincluding because the requested judgment would violate Rule 54(b) of the Federal Rules of CivilProcedure, as Samsung will demonstrate in a separate filing setting forth its objections to Apple’sproposed form of judgment.



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moved for judgment as a matter of law of invalidity of the ’915 patent based on the Nomura

reference. The Court denied Samsung’s motion on January 29, 2013. Dkt. 2220.

On March 1, 2013, the Court issued an order granting a partial retrial on damages issues,

including damages issues relating to the ’915 patent. This trial focused on a subset of products

and patents based on corrected dates on which Samsung first had notice of those patents. The

second trial took place in November 2013, and the jury awarded new damages amounts based on

corrected notice dates. In March 2014, the Court entered a final judgment in favor of Apple.

Samsung appealed several findings to the Federal Circuit, including the finding that

Nomura did not anticipate claim 8 of the ’915 patent. On May 18, 2015, the Federal Circuit

affirmed the jury’s finding that claim 8 of the ’915 patent was not anticipated by Nomura.

B. The United States Patent And Trademark Office Proceedings

On May 30, 2012, an anonymous third party requested ex parte reexamination of the ’915

patent. (RJN Ex. 1.)2 The PTO found that a substantial question of patentability existed and

reexamination proceedings commenced. (RJN Ex. 2.) On December 19, 2012, the PTO

examiner issued a first office action rejecting all 21 claims of the ’915 patent for multiple reasons.

(RJN Ex. 3) The examiner rejected claim 8 under 35 U.S.C. § 102(e) as anticipated by Hillis,

and also under 35 U.S.C. § 103(a) as unpatentable over Nomura in view of Rubine. ( Id . at 3, 6-9

21-24.) Samsung did not previously raise these arguments in this action.

On March 14, 2013, six representatives from Apple including one of the inventors, an

expert witness, prosecution counsel, and trial counsel attended an in-person interview with the

examiner. (RJN Ex. 4.) All claims of the ’915 patent, as well as the Nomura and Hillis

reference, were discussed during the interview. ( Id.; RJN Ex. 5 at 2.) Apple then filed its

response to the first office action, arguing that all claims were patentable. (RJN Ex. 5.) Apple

submitted a declaration from its technical expert Dr. Jason Nieh, an Associate Professor of

Computer Science at Columbia University, in support of its arguments. (RJN Ex. 6.)

2 “RJN Ex. __” refers to the exhibits attached to Samsung’s Request for Judicial Notice ofPTO and PTAB Documents Relating to Reexaminations of ’915 and D’677 Patents, filedconcurrently herewith.



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On July 26, 2013, the PTO examiner issued a final rejection of all claims of the ’915 patent

as anticipated or obvious, again finding claim 8 to be anticipated by Hillis and obvious over

Nomura in view of Rubine. (RJN Ex. 7 at 23-24.) On October 28, 2013, Apple filed its

response to the examiner’s final rejection. (RJN Ex. 8.) On November 20, 2013, the examiner

issued an advisory action, maintaining his position that claim 8 of the ’915 patent is anticipated by

Hillis and rendered obvious by the combination of Nomura and Rubine. (RJN Ex. 9.)

On December 26, 2013, Apple filed a notice of appeal with the PTAB. (RJN Ex. 10.)

On February 26, 2014, Apple filed its opening appeal brief (RJN Ex. 11); the examiner filed its

answering brief on May 2, 2014 (RJN Ex. 12); and Apple filed a reply on July 2, 2014 (RJN Ex.

13). Apple requested an oral hearing the same day, and the PTAB granted that request. (RJN

Ex. 14; RJN Ex. 15.) The hearing took place in Washington, D.C. on November 19, 2014.

(RJN Ex. 15.) Apple sent five representatives to the hearing. (RJN Ex. 16.) Two of the

Administrative Law Judges assigned to the appeal (ALJ Whitehead and ALJ Chung) attended the

hearing in person. (RJN Ex. 17 (Hearing Transcript) at 1.) The third (ALJ Saadat) attended via

videoconference. ( Id .) On December 9, 2014, the PTAB issued its final decision on the appeal,

affirming the rejection of all claims of the ’915 patent. (RJN Ex. 18 at 12.)

On February 9, 2015, Apple filed a request for rehearing. (RJN Ex. 19.) That request is

pending, and will likely be decided soon.3 If the PTAB denies Apple’s rehearing request,

Apple’s only recourse will be to appeal to the Federal Circuit. 35 U.S.C. § 141 (“A patent owner

who is dissatisfied with the final decision in an appeal of a reexamination to the Patent Trial and

Appeal Board under section 134(a) may appeal the Board’s decision only to the United States

Court of Appeals for the Federal Circuit.”).

Separately, an ex parte reexamination request for the D618,677 patent (“D’677”) was filed

on May 31, 2013. (RJN Ex. 20.) On August 19, 2013, the PTO granted the request, finding a

3 As of May 2015, there were five requests for rehearing for ex parte reexaminationspending before the PTAB. (RJN Ex. 23.) Of those five, four have been pending for less thansix months and one has been pending between seven and thirteen months. ( Id .) In addition, thenumber of rehearing requests has been rapidly declining over the past 9 months, which indicatesthat the PTAB is addressing rehearing requests expeditiously. ( Id .)



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substantial new question of patentability affecting the D’677 patent. (RJN Ex. 21.) On August

5, 2015, the PTO examiner issued an Office Action stating four separate categories of rejection for

the claim of D’677. (RJN Ex. 22 at 4-12.) The first three of those rejections utilized multiple

configurations of primary and secondary references to create eight independent, alternative

obviousness combinations, none of which were previously resolved by this Court. ( Id.) The

examiner also found that the D’677 patent was not entitled to a priority filing date of January 5,

2007 based on parent applications and instead could only claim its own filing date of November

18, 2008. ( Id . at 2.) Apple was given two months to respond to the examiner’s office action.

III. THE COURT SHOULD ENTER JUDGMENT OF INVALIDITY OF THE ’915PATENT AND VACATE LIABILITY AND DAMAGES ON PRODUCTS FORWHICH ’915 INFRINGEMENT DAMAGES WERE AWARDED

A. Judgment Of Invalidity Is Required Based On Collateral Estoppel

1. Final PTO/PTAB Invalidity Decisions Are Entitled To CollateralEstoppel Effect

The law has long been clear that final decisions of federal courts invalidating a patent are

entitled to collateral estoppel effect in separate pending litigations. The rule should be no

different for final invalidity decisions issued by the PTAB. While the Federal Circuit has not

resolved this question one way or the other—it expressly left it open last year, see AbbVie

Deutschland GmbH & Co. v. Janssen Biotech, Inc., 759 F.3d 1285, 1296-97 (Fed. Cir. 2014)

(suggesting, but declining to decide, “[w]hether a Board’s interference decision that is on appeal

under § 141 can have collateral estoppel effect on issues raised in a co-pending litigation”)—

recent Supreme Court authority holds that agency decisions are entitled to collateral estoppel

effect no less than decisions of federal courts.

The Supreme Court long ago established that once the claims of a patent are held invalid in

one lawsuit, defendants are entitled to the benefit of that invalidity decision in unrelated

infringement cases under principles of collateral estoppel. See Blonder–Tongue Labs., Inc. v.

Univ. of Ill. Found., 402 U.S. 313 (1971). The Federal Circuit has applied this rule consistently

and without exception ever since, ruling that final judgments of patent invalidity are entitled to

preclusive effect in ongoing infringement litigations. See, e.g., Pharmacia & Upjohn Co. v.



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Mylan Pharms., Inc., 170 F.3d 1373, 1379-82 (Fed. Cir. 1999) (patent owner collaterally estopped

from asserting infringement claim in light of prior district court judgment of invalidity);

Mendenhall v. Barber–Greene Co., 26 F.3d 1573, 1584 (Fed. Cir. 1994) (requiring vacatur of

judgment of patent infringement on same basis). Indeed, the Federal Circuit has so ruled even

when invalidity had not previously been asserted as a defense. Thompson-Hayward Chem. Co. v.

Rohm and Haas Co., 745 F.2d 27, 34 (Fed. Cir. 1984) (applying collateral estoppel to invalidate

patent even where defendant previously “chose not to litigate validity”).

There is no reason that the rule should be different for final PTAB invalidity decisions

issued following ex parte reexamination proceedings. In fact, earlier this year the Supreme Court

held that a final decision by an administrative agency—in that case, the Trademark Trial and

Appeal Board (TTAB), which is the trademark analog to the PTAB—has collateral estoppel effect

in a district court action no less than a final decision of another federal court, “[s]o long as the

other ordinary elements of issue preclusion are met.” B&B Hardware, Inc. v. Hargis Indus., Inc.,

135 S.Ct. 1293, 1310 (2015). In that case, the TTAB had ruled that a party’s proposed trademark

could not be registered. In holding that this ruling was preclusive in subsequent district court

litigation, the Supreme Court explained:

Both this Court’s cases and the Restatement make clear that issue preclusionis not limited to those situations in which the same issue is before two courts.Rather, where a single issue is before a court and an administrative agency,preclusion also often applies. Indeed, this Court has explained that becausethe principle of issue preclusion was so “well established” at common law, inthose situations in which Congress has authorized agencies to resolvedisputes, “courts may take it as given that Congress has legislated with theexpectation that the principle [of issue preclusion] will apply except when astatutory purpose to the contrary is evident.” … This reflects the Court’slongstanding view that “‘[w]hen an administrative agency is acting in a judicial capacity and resolves disputed issues of fact properly before it whichthe parties have had an adequate opportunity to litigate, the courts have not

hesitated to apply res judicata to enforce repose.’”

Id . at 1303 (citations omitted) (emphasis in original). The Court then held: “So long as the

other ordinary elements of issue preclusion are met, when the usages adjudicated by the TTAB are

materially the same as those before the district court, issue preclusion should apply.” Id. at 1310.

The Restatement, cited with approval in B&B Hardware, similarly provides that “a valid and final

adjudicative determination by an administrative tribunal has the same effects under the rules of res



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judicata, subject to the same exceptions and qualifications, as a judgment of a court.”

Restatement (Second) of Judgments § 83(1) (1982).

Even before the Supreme Court’s B&B Hardware decision, several district courts had

concluded that PTAB invalidity decisions following ex parte reexaminations were entitled to

collateral estoppel effect in district court actions. See, e.g., In re Katz Interactive Call Processing

Patent Litig., 2013 WL 3223382, at *1-2 (C.D. Cal. June 12, 2013) (applying collateral estoppel to

PTAB’s invalidity decision); Tan v. Integrated Silicon Solutions, Inc., 2008 WL 2340217, at *3-4

(N.D. Cal. June 5, 2008) (same as to decision of Board of Patent Appeals and Interferences

(BPAI), which is the former name of the PTAB). These decisions were decided correctly,

particularly in light of the procedural protections afforded to the patent-holder in ex parte

reexaminations. Indeed, a final decision of patent invalidity on reexamination by the PTO—the

agency that grants patent rights in the first place, and that is authorized by statute to revoke them,

see 35 U.S.C §§ 301-307—should be afforded at least as much deference as an invalidity ruling of

a district court.

2. The PTAB’s Invalidity Ruling Satisfies Each Element Of CollateralEstoppel

Under applicable Ninth Circuit law, collateral estoppel applies if: (1) the party against

whom collateral estoppel is asserted was a party or in privity with a party at the first proceeding;

(2) an issue necessarily decided in the prior proceeding is identical to the one at issue in the later

proceeding; and (3) the first proceeding ended with a final judgment on the merits. e.Digital

Corp. v. Futurewei Techs., Inc., 772 F.3d 723 (Fed. Cir. 2014) (citing Hydranautics v. FilmTec

Corp., 204 F.3d 880, 885 (9th Cir. 2000)). In addition, B&B Hardware explains that the

procedural fairness and adequacy of the administrative proceedings should be considered. 135

S.Ct. at 1309. Each of these requirements is satisfied here.

(1) Apple was a party to the reexamination proceedings. It thus cannot dispute that

the privity requirement is met.

(2) The issue decided in the reexamination proceedings—that the ’915 patent is invalid

—is identical to the issue of whether that patent is invalid in this case.



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(3) The reexamination proceeding ended with a final judgment on the merits.

Although Apple may appeal the invalidity decision to the Federal Circuit, the Supreme Court long

ago recognized the well-established federal rule “that the pendency of an appeal has no effect on

the finality or binding effect of a trial court’s holding.” Pharmacia & Upjohn, 170 F.3d at 1381

(citing Deposit Bank v. Board of Councilmen of City of Frankfort, 191 U.S. 499 (1903)). And

applying this rule, the Federal Circuit and district courts have likewise repeatedly held that district

court invalidity decisions have collateral estoppel effect despite the pendency of appeals. See,

e.g., Pharmacia & Upjohn, 170 F.3d at 1379 (collateral estoppel applied to district court invalidity

determination notwithstanding potential for appeal to the Federal Circuit); SSIH Equip. S.A. v.

U.S. Int’l Trade Comm’n, 718 F.2d 365, 370 (Fed. Cir. 1983) (same, despite pendency of appeal);

DietGoal Innovations LLC v. Chipotle Mexican Grill, Inc., 70 F. Supp. 3d 808, 812 (E.D. Tex.

2014) (Bryson, J.) (same); JuxtaComm-Texas Software, LLC v. Lanier Parking Sys. of Va., Inc.,

944 F. Supp. 2d 469, 478 (E.D. Va. 2013) (“[D]espite JuxtaComm’s argument that there is a

substantial risk that the JuxtaComm II judgment will be reversed, the pendency of the appeal does

not undermine the finality of the JuxtaComm II judgment.”); Galderma Labs Inc. v. Amneal

Pharm., LLC , 921 F. Supp. 2d 278, 281 (D. Del. 2012) (same).

Nor does the pendency of Apple’s petition for rehearing undermine collateral estoppel, for

it is equally well-established that such post-decision motions are no obstacle to the application of

estoppel. See, e.g., Pharmacia & Upjohn, 170 F.3d at 1382 (“[T]he district court did not err in

applying collateral estoppel based on the judgment of invalidity and unenforceability …, despite

the fact that the motion for JMOL/new trial had not been resolved …, and despite the possibility

of a subsequent appeal of the [] judgment.”); Tripati v. Henman, 857 F.2d 1366, 1367 (9th Cir.

1988) (“A pending Rule 59(e) motion similarly does not deprive a judgment of finality for res

judicata purposes.”); CollegeNET, Inc. v. Applyyourself, Inc., 2008 WL 4793683, at *3 (D. Or.

Oct. 28, 2008) (“Final judgment in the XAP case was filed on October 17, 2008. This Judgment

is final for purposes of applying collateral estoppel, notwithstanding that plaintiff may file a

motion for judgment as a matter of law (JMOL) or an appeal.”); Restatement (Second) of

Judgments § 13 cmt. f (1982) (“A judgment otherwise final for purposes of the law of res judicata



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is not deprived of such finality by the fact that time still permits commencement of proceedings in

the trial court to set aside the judgment and grant a new trial or the like; nor does the fact that a

party has made such a motion render the judgment nonfinal.”). As a leading treatise explains,

“[t]here seems to be no compelling argument for treating such [post-trial] motions or possible

[post-trial] motions any differently than appeals. Finality should attach for claim preclusion

purposes at the time of entry of judgment.” 18 James Wm. Moore, Moore’s Federal Practice

§ 131.30[2] [c] [iv] (3d ed. 1998).

Nor is the rule any different when it comes to determinations by an administrative agency.

As the Restatement explains, “[a]n administrative adjudication becomes preclusive when it has

become final in accordance with the rules stated in §§ 13 and 14 [setting forth the ordinary rules of

finality of federal court decisions]. It is not necessary that the administrative adjudication have

been reviewed and affirmed by a court.” Restatement (Second) of Judgments § 83 cmt. A

(1982). Several district courts have held that PTAB decisions are final for purposes of collateral

estoppel despite the possibility or pendency of an appeal. See In re Katz Interactive Call

Processing Patent Litig., 2013 WL 3223382, at *2 (C.D. Cal. June 12, 2013) (applying collateral

estoppel to PTAB decision notwithstanding possibility of appeal to Federal Circuit); Tan v.

Integrated Silicon Solutions, Inc., 2008 WL 2340217, at *3-4 (N.D. Cal. June 5, 2008) (same,

while Federal Circuit appeal was pending). And other courts apply collateral estoppel similarly

based on decisions made by other administrative agencies. See, e.g., Ruyle v. Continental Oil

Co., 44 F.3d 837, 845-46 (10th Cir. 1994) (holding that agency decision was preclusive despite

pendency of appeal).

There is one exception to the rule that the pendency or possibility of an appeal does not

defeat collateral estoppel: if the appeal would involve a full trial de novo, collateral estoppel may

not apply. See Restatement (Second) of Judgments 13 cmt. f (1980) (“a judgment otherwise final

remains so despite the taking of an appeal unless what is called an appeal actually consists of a

trial de novo.”). Relying on this exception, the Federal Circuit previously rejected applying

collateral estoppel to PTAB patent interference decisions which are subject to a district court’s de

novo review under 35 U.S.C. § 146 , explaining that a “Board decision that is reviewed under



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§ 146 is not a ‘binding final judgment’” because, with appeals under § 146, “a district court can

make a de novo determination of facts upon the submission of new evidence.” AbbVie, 759 F.3d

at 1296-97. But the court made clear that its ruling did not apply to an appeal to the Federal

Circuit under 35 U.S.C. § 141: “Unlike a § 146 action, a direct appeal under § 141 is based

solely on the agency record and reviewed under the standard established by the Administrative

Procedure Act and is therefore more akin to a traditional appeal from a district court decision.”

Id. at 1296. In this case, Apple can appeal the PTAB’s invalidity decision only under § 141 to

the Federal Circuit, and not under § 146 to a district court. See 35 U.S.C § 141(b) (“A patent

owner who is dissatisfied with the final decision in an appeal of a reexamination to the Patent Trial

and Appeal Board under section 134(b) may appeal the Board’s decision only to the United States

Court of Appeals for the Federal Circuit.”). Collateral estoppel therefore fully applies to the

PTAB’s final decision.

(4) Apple also had a full and fair opportunity to litigate the validity issue in the PTO

proceedings, and this factor identified in the B&B Hardware decision is thus satisfied as well. In

the context of administrative proceedings, the Supreme Court explained that “what a full and fair

opportunity to litigate entails is the procedural requirements of due process.” Kremer v. Chem.

Const. Corp., 456 U.S. 461, 483 n. 24 (1982). “Redetermination of issues is warranted if there is

reason to doubt the quality, extensiveness, or fairness of procedures followed in prior litigation.”

Id. at 481 (quoting Montana v. United States, 440 U.S. 147, 164 n. 11 (1979)); see also B&B

Hardware, 135 S.Ct. at 1309 (“Rather than focusing on whether procedural differences exist—

they often will—the correct inquiry is whether the procedures used in the first proceeding were

fundamentally poor, cursory, or unfair.”) (citing Montana, 440 U.S. at 164 n. 11). In Kremer , the

Supreme Court found that the plaintiff had received adequate due process from the state agency

that reviewed his charge of employment discrimination since he was entitled to an attorney, could

submit exhibits and present testimony from witnesses, and had the opportunity for administrative

and judicial review. 456 U.S. at 483-84. The Supreme Court had “no hesitation in concluding

that this panoply of procedures, complemented by administrative as well as judicial review, is

sufficient under the Due Process Clause.” Id. at 484. In the reexamination proceedings, Apple



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was represented by patent prosecution and trial counsel, was able to extensively brief the validity

issues and present evidence and expert declarations, had the opportunity for interviews with the

examiner, and had the opportunity for administrative review of the examiner’s decision by the

PTAB. There is no reason whatsoever to doubt the quality, extensiveness or fairness of the

PTO’s reexamination procedures.

3. Collateral Estoppel May Be Raised At Any Stage Of The Proceedings

Finally, there is no doubt that collateral estoppel properly may be raised at this time. The

Federal Circuit has ruled repeatedly that a collateral determination of patent invalidity can “be

timely made at any stage of the affected proceedings,” including for the first time on appeal.

Dana Corp. v. NOK, Inc., 882 F.2d 505, 507 (Fed. Cir. 1989) (reversing finding of infringement);

Thompson-Hayward Chem. Co. v. Rohm & Haas Co., 745 F.2d 27, 32-33 (Fed. Cir. 1984)

(similar). Similarly, collateral estoppel can be raised following a remand from a prior appeal.

In Mendenhall, for example, the patent owner asserted its patents in concurrent suits against two

alleged infringers, Cedarapids and Astec. 26 F.3d at 1576–77. On appeal, the Federal Circuit

affirmed a verdict from the Astec court finding that the patents were not invalid, but remanded “for

determination of damages and other issues.” Id. at 1576. While that case was on remand, the

district court in the Cedarapids suit invalidated the same patents, and the Federal Circuit

subsequently affirmed. Id. at 1577. The Federal Circuit then found in the Astec case that the

Cedarapids decision barred the patent owner from recovering for infringement and damages, even

though the judgment of validity in that case had been affirmed, because the patents were

invalidated before the judgment became completely final. Id. at 1577-78. See also Fresenius

USA, Inc. v. Baxter Int’l, Inc., 721 F.3d 1330, 1333 (Fed. Cir. 2013) (requiring defense judgment

in light of PTO cancellation of patent despite having previously affirmed district court’s finding

that patent was not invalid).

Final judgment has not been entered in this case, and further damages proceedings are

required for the ’915 patent. The Federal Circuit’s mandate instructs the Court to undertake

“further proceedings necessitated by [its] decision to vacate the jury’s verdicts on the unregistered

and registered trade dress claims,” Slip. Op. at 33, and this will require further damages



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proceedings on the ’915 patent (absent the entry of judgment for Samsung) because four of those

products were found to infringe that patent. See Dkt. 2271 at 9-10, 22 (finding damages awards

for Fascinate, Galaxy S 4G, Mesmerize, and Vibrant based on trade dress liability); id . at 19-20

(same products held to infringe ’915 patent). Moreover, supplemental damages and prejudgment

interest remains undetermined as to all products found to infringe the ’915 patent. Dkt. 2947 at

3. Collateral estoppel thus may be raised at this time.

B. The Court Should Vacate The Judgment Of Infringement Of The ’915 PatentAnd The Damages Awards For All Products On Which ’915 InfringementDamages Were Awarded

Because the PTAB’s final invalidation of the ’915 patent has collateral estoppel effect, the

judgment of infringement by 21 Samsung products found to infringe the ’915 patent should be

vacated.4 In addition, the award of damages should be vacated as to the 13 products found to

infringe the ’915 patent for which ’915 patent infringement damages were awarded.5 Apple

explicitly sought (and received) damages based on infringement of the ’915 patent as to 12 of

these products. See Dkt. 2947 at 4 (based on Apple’s representations that “the jury adopted

Apple’s proposed lost profits and reasonable royalty calculations”). And the Court previously

ruled that the damages award for the thirteenth, the Galaxy Tab 10.1 (WiFi), was based in part on

’915 patent infringement. See Dkt. 2271 at 19-20 (listing the Galaxy Tab 10.1 (WiFi) among

products eligible for ’915 patent damages) and 26 (upholding damages award on Galaxy Tab 10.1

(WiFi).)6 Apple did not appeal these rulings and, to the contrary, expressly stated on appeal that

it was not challenging this Court’s adoption of Samsung’s reverse-engineering of specific

damages amounts. See July 28, 2014 Appellee’s Brief at 21 n. 1.

4 Those products are: Captivate, Continuum, Droid Charge, Epic 4G, Exhibit 4G

Fascinate, Galaxy Prevail, Galaxy S (i9000), Galaxy S 4G, Galaxy S II 2 (AT&T), Galaxy S II(i9100), Galaxy S II (T-Mobile), Galaxy Tab, Galaxy Tab 10.1 (WiFi), Gem, Indulge, Infuse 4G,Mesmerize, Nexus S 4G, Transform, Vibrant.

5 They are: Captivate, Continuum, Droid Charge, Epic 4G, Exhibit 4G, Galaxy PrevailGalaxy Tab, Galaxy Tab 10.1 (WiFi), Gem, Indulge, Infuse 4G, Nexus S 4G, Transform.

6 In the same order, the Court held that the damages for six other products found to infringethe ’915 patent (Fascinate, Galaxy S 4G, Galaxy S II 2 (AT&T), Galaxy S II (T-Mobile)Mesmerize, and Vibrant) were not based on ‘915 patent infringement. See Dkt. 2271 at 18-26No damages were awarded for two of the 21 products held to infringe the ‘915 patent (Galaxy S(i9000) and Galaxy S II (i9100). Id . at 9-10.



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Moreover, the awards for each of these 13 products must be vacated in their entirety

because those awards were lump-sums, undifferentiated by patent. Verizon Servs. Corp. v.

Vonage Holdings Corp., 503 F.3d 1295, 1309-10 (Fed. Cir. 2007) (vacating damages in a multi-

patent case because “the jury rendered a single verdict on damages, without breaking down the

damages attributable to each patent”).

IV. ALTERNATIVELY, THE COURT SHOULD STAY FURTHER PROCEEDINGSPENDING ANY APPEAL OF THE PTAB’S FINAL DECISION INVALIDATINGTHE ’915 PATENT

This Court has broad, inherent power to stay proceedings pending the outcome of other

related actions. In the event that the Court does not grant Samsung judgment of invalidity of the

’915 patent, the Court should exercise its power to stay further proceedings in this case pending

completion of the time period for any appeal of the PTAB invalidation of the ’915 patent. A stay

would simplify the issues that remain to be determined, prevent the waste of judicial and party

resources, avoid inconsistent results both within this case and across fora, and avoid substantial

prejudice to Samsung with no corresponding harm to Apple.7

“[T]he power to stay proceedings is incidental to the power inherent in every court to

control disposition of the causes on its docket with economy of time and effort for itself, for

counsel, and for litigants.” Landis v. N. Am. Co., 299 U.S. 248, 254 (1936). Inherent in that

discretion is the power to stay proceedings pending the outcome of a related action. See CMAX,

Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962). “This rule applies whether the separate

proceedings are judicial, administrative, or arbitral in character . . . .” Leyva v. Certified Grocers

of Cal., Ltd ., 593 F.2d 857, 863 (9th Cir. 1979). The Federal Circuit recognizes the power of

district courts to stay proceedings “pending conclusion of a PTO reexamination.” Ethicon, Inc.

v. Quigg, 849 F.2d 1422, 1426-27 (Fed. Cir. 1988) (citing Landis).

7 The appropriateness of a stay for all the below-detailed reasons is further underscored bythe pendency of the D’677 reexamination, which has resulted in a First Office Action rejecting theclaim as invalid in light of numerous obviousness combinations. Although the D’677 proceedingis not as advanced as the ’915 proceeding, that proceeding also may well require vacatur ofdamages awarded in this case prior to final judgment. If a stay issues pending resolution of thefinal appeal of the ’915 patent, that stay can be reassessed as to the D’677 patent based on thethen-current stage of PTO proceedings.



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In the Ninth Circuit, “the competing interests which will be affected by the granting or

refusal to grant a stay must be weighed” in deciding whether to issue a stay. CMAX , 300 F.2d

at 268. “Among these competing interests are [1] the possible damage which may result from the

granting of a stay, [2] the hardship or inequity which a party may suffer in being required to go

forward, and [3] the orderly course of justice measured in terms of the simplifying or complicating

of issues, proof, and questions of law which could be expected to result from a stay.” Id. (citing

Landis, 299 U.S. at 254-55); see also Versa Corp. v. Ag-Bag Int’l Ltd., No. CV-01-544-HU, 2001

WL 34046241, at *1 (D. Or. Sept. 14, 2001) (relying on CMAX factors in considering stay

pending PTO interference proceeding). Courts considering stays pending PTO reexaminations

typically consider the stage of the respective proceedings as well. E.g., Network Appliance, Inc.

v. Sun Microsystems Inc., No. C-07-06053 EDL, 2010 WL 545855, at *2-3 (N.D. Cal. Feb. 11,

2010); Delphix Corp. v. Actifio, Inc., No. 13-CV-04613-BLF, 2014 WL 6068407, at *2 (N.D. Cal.

Nov. 13, 2014). “[T]here is a liberal policy in favor of granting motions to stay proceedings

pending the outcome of reexamination or reissuance proceedings.” ASCII Corp. v. STD Entm’t

USA, Inc., 844 F.Supp. 1378, 1381 (N.D. Cal. 1994).

A. The Orderly Administration Of Justice Warrants A Stay

1.

A Stay Will Avoid Inconsistent Judgments Across Fora

A stay is needed, first, to avoid a severe risk of inconsistent judgments. Apple is seeking

entry of partial final judgment with respect to products found to infringe the ’915 patent and on

which ’915 infringement damages have been awarded. If entered now, after the PTO has issued

a final decision invalidating that patent, such a judgment (which is not proper under Rule 54(b) in

any event) would create a stark disparity between the judgments of this Court and the PTO.

Even if the PTAB’s final decision of invalidity were not entitled to immediate preclusive

effect (which it is), entry of a partial final judgment of liability and damages would display a lack

of respect for the agency tasked by Congress with creating and dissolving patent rights. The

“cloud of invalidity” that covers the ’915 patent precludes a final judgment of liability and

damages, Juxtacomm-Texas Software, LLC v. Lanier Parking Sys. of Va., Inc., No. 3:11–CV–299,

2011 WL 3322554, at *2 (E.D. Va. Aug. 2, 2011) (granting stay following Final Office Action of



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invalidity), and the need to avoid “inconsistent results” thus fully supports a stay. See, e.g.,

Delphix, 2014 WL 6068407, at *2; Coho Licensing LLC v. Glam Media, No. C 14-01576 JSW,

2014 WL 4681699, at *2 (N.D. Cal. Sept. 17, 2014); Evolutionary Intelligence, LLC v. Apple,

Inc., No. C 13-04201 WHA, 2014 WL 93954, at *2-3 (N.D. Cal. Jan. 9, 2014) (granting Apple’s

own motion to stay proceedings pending reexamination in part to “minimize the risk of

inconsistent results” across fora).

2. A Stay Will Avoid Inconsistent Judgments Within This Case

Absent a stay, there is a substantial risk of internally inconsistent judgments as well.

Four of the five products found to dilute Apple’s trade dresses, as to which the prior damages

awards were vacated on appeal, were also found to infringe the ’915 patent: the Fascinate,

Galaxy S 4G, Mesmerize, and Vibrant. See Dkt. 2271 at 19-20. Unless judgment for Samsung

is entered, further proceedings will be needed to determine damages for these products, including

for supposed ’915 patent infringement. And even if the PTAB’s final decision were not

sufficiently final to be preclusive now (which it is), it will become completely final and preclusive

in short order, entitling Samsung to judgment in this case. See supra; see also Fresenius, 721

F.3d at 1344-46 (holding that PTO cancellation renders patent void ab initio, requiring a defense

judgment in ongoing infringement proceedings); ePlus, Inc. v. Lawson Software, Inc., 760 F.3d

1350, 1355-1360 (Fed. Cir. 2014) (similar).

But if the Court has, by that point, granted Apple’s demand that it enter a partial final

judgment as to some products found to infringe the ’915 patent, the Court’s varying judgments

will be internally inconsistent. One judgment will find the ’915 patent valid and infringed (as to

some accused products), and the next will find the same patent invalid and not infringed (as to

other similarly-situated products). A stay will avoid these inconsistent results.

3. A Stay Will Avoid A Waste Of Resources

A stay will also avoid wasting judicial and party resources by confirming whether the

Court should remove the ’915 patent from the damages equation in re-determining damages for

the products erroneously found to dilute trade dress. The prior jury verdicts did not state what



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portions of damages were attributable to the ’915 patent, and new damages proceedings will

therefore be needed for products for which trade-dress dilution damages were wrongly awarded.

But the contours of these new damages proceedings will vary depending on the status of

the ’915 patent. It would be wasteful to proceed with damages proceedings, including potentially

even a third trial, when those proceedings may well be rendered moot by further proceedings

relating to the PTAB’s invalidation decision. A stay of further damages proceedings is warranted

to avoid such waste. See, e.g., Cardenas v. AmeriCredit Fin. Servs., No. C 09-04978 SBA, 2011

U.S. Dist. LEXIS 29105, at *12 (N.D. Cal. Mar. 7, 2011) (granting stay to avoid waste in

“conducting further proceedings, up to and including preparing for and conducting a trial[,] that

may ultimately be unnecessary”) (emphasis in original). Considerations of the “economy of time

and effort for [the Court], for counsel, and for litigants” warrant a stay. Landis, 299 U.S. at 254.

B. A Stay Is Warranted Based On The Stage Of Both Proceedings

A stay is also warranted in light of the advanced stage of the ’915 patent proceedings at the

PTO relative to the stage of the proceedings here. The stage of this case must be viewed “‘in

comparison to the stage of the PTO reexaminations.’” Juxtacomm-Texas Software, 2011 WL

3322554, at *2 (quoting MercExchange, LLC v. eBay Inc., 500 F. Supp. 2d 556, 565 (E.D. Va.

2007)). The Federal Circuit has also instructed that courts should “focus[] prospectively on the

impact of the stay on the litigation, not on the past actions of the parties” or through a “backward-

looking lens.” Versata Software Inc. v. Callidus Software, Inc., 771 F.3d 1368, 1375 (Fed. Cir.

2014) (subsequently vacated for mootness).

The ’915 patent reexamination proceeding is in its final stage. In this case, by contrast,

extensive further proceedings as to ’915 patent infringement damages will be required, including

as to the four products for which both trade-dress dilution and ’915 patent infringement liability

was found. This Court previously ruled that a new damages trial was needed in similar

circumstances, when the Court “identified an impermissible legal theory on which the jury based

its award,” Dkt. 2271 at 26, and Apple may well seek such a new damages trial again here. See

also Verizon Servs. Corp., 503 F.3d at 1310 (where jury did not “break[] down the damages



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attributable to each patent, the normal rule would require a new trial as to damages”). But while

costly damages proceedings remain in this case, only rehearing and appeal remain in the PTAB.

It makes no difference that only damages remain to be determined in this case. In fact, in

Standard Havens Products, Inc. v. Gencor Industries, Inc., 996 F.2d 1236 (Fed. Cir. 1993)

(unpublished table decision), a decision previously addressed by this Court, see Dkt. 2831 at 6, the

Federal Circuit reversed an order denying a stay of a damages-only trial because the patent had

been held invalid by the BPAI after reexamination. Although the appeal process was ongoing, it

was “legal error” to deny the stay on the basis that the reexamination could no longer have an

effect on the lawsuit because, “if a final decision of unpatentability means the patent was void ab

initio, then damages would also be precluded.” Id.

Similarly, in Ultratec, Inc. v. Sorenson Communications, Inc., No. 13-CV-346-BBC, 2015

WL 2248437 (W.D. Wis. May 13, 2015), the district court granted a stay pending reexamination

after the jury had already rendered its verdict and only post-trial motions were pending. Id. at *4

The court had denied two previous motions to stay when the PTO proceedings were at an earlier

stage. Id. at *2. But after trial, the PTO issued a final decision invalidating some of the claims

at issue, id., and this mandated a stay. Id. at *5 (citing Standard Havens and Flexiteek Americas,

Inc. v. PlasTEAK, Inc., No. 08-60996-CIV, 2010 WL 2976859, at *5–6 (S.D. Fla. July 20, 2010)

(staying execution of final judgment pending appeal of final decision in ex parte reexamination)).

The Federal Circuit affirmed this stay ruling, holding that because the PTAB had already

ruled the relevant claims invalid, “the district court could reasonably have concluded a stay would

simplify the rest of this litigation, conserve resources, and eliminate inconsistent results.”

Ultratec, Inc. v. CaptionCall, LLC , No. 2015-1694, 2015 WL 4528272, at *2 (Fed. Cir. June 30,

2015) (unpublished). The Federal Circuit also rejected the argument that “the advanced stage of

th[e] litigation demands a more compelling reason for a stay,” finding instead that “[Petitioners]

cite no authority that precludes a district court from staying proceedings once a jury has rendered a

verdict, while the district court and Respondents cite contrary cases [such as] Standard Havens.”

Id.



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C. A Stay Will Prevent Hardship And Inequity To Samsung

A stay will prevent significant inequity to Samsung. The need to engage in further

damages proceedings that may be mooted by subsequent events constitutes hardship. And if

Samsung were ordered by judgment to pay over $120 million on a claim that should never have

been brought, the harm could be irreparable. See Everything For Love.com, Inc. v. Tender

Loving Things, Inc., No. CIV 02-2605-PHX-EHC, 2006 WL 2091706, at *4 (D. Ariz. Jul. 21,

2006) (“If Plaintiff acquires a judgment against Defendant for infringement, and the ’980 patent is

subsequently held invalid by the PTO, there exists the possibility of irreparable harm to

Defendant…”); Bausch & Lomb Inc. v. Alcon Labs., Inc., 914 F. Supp. 951, 952 (W.D.N.Y. 1996)

(“[O]ne possible scenario could result in irreparable harm to Alcon: if this Court finds that the

’607 is not invalid and that Alcon has infringed it, and orders Alcon to pay damages to B & L for

such infringement, then Alcon would have no ability to recover those damages if at a later date the

PTO determined that the ’607 patent is invalid.”). Indeed, the Federal Circuit has recognized the

unfairness that would result from enforcement of patents in one proceeding “when the rest of the

industry is not impeded by the patents” because they have been invalidated in another.

Mendenhall, 26 F.3d at 1583; see also ePlus, Inc. v. Lawson Software, Inc., 790 F.3d 1307, 1309

(Fed. Cir. 2015) (Dyk., J., concurring) (similar).

D. A Stay Will Not Harm Apple

By contrast, Apple will not suffer undue harm from a temporary stay. Apple’s 2014

judgment is fully secured by the bond Samsung posted in the amount of $1 billion—well more

than the ultimate judgment will be in this case. The interest accruing on the judgment is also

secured by the bond, which compensates Apple for any economic harm from a delay in payment.

Thus, if the Federal Circuit reinstates the patent on appeal, a stay will have merely delayed

Apple’s recovery of monetary damages with interest. “Mere delay, without more though, does

not demonstrate undue prejudice,” Nanometrics Inc. v. Nova Measuring Instruments, Ltd., No. C

06-2252 SBA, 2007 WL 627920, at *3 (N.D. Cal. Feb. 26, 2007), and “a delay in recovering

potential monetary damages is not sufficient harm.” N. River Ins. Co. v. Leffingwell Ag Sales

Co., No. CV-F-10-2007 LJO MJS, 2011 U.S. Dist. LEXIS 8208, at *18 (E.D. Cal. Jan. 27, 2011).



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Because the only relief at issue in this case is monetary, this factor “weighs heavily in favor of

staying the case.” Broad. Innovation, L.L.C. v. Charter Commc’n, Inc., No. CIV 03-CV-2223-

ABJ-BNB, 2006 WL 1897165, at *10-11 (D. Colo. July 11, 2006); see CMAX , 300 F.2d at 268-69

(plaintiff failed to show prejudice from delayed judgment where the only relief sought was

“money damages”); Brown v. Shimano Am. Corp., No. CV 88-6565 WJR (BX), 1991 WL 133586,

at *1 (C.D. Cal. Jan. 29, 1991) (similar).

If, by contrast, the Federal Circuit affirms the invalidation of the ’915 patent (or Apple

fails to appeal), then Apple will have no right to any damages based on that patent. Apple’s

inability to collect a money judgment on an invalid patent that never should have issued is not a

cognizable harm. See Flexiteek Americas, 2012 WL 5364263, at *9 (“[I]t would be inequitable

and unjust to let stand, let alone enforce, an injunction and an unexecuted money judgment

predicated on a patent claim found to be invalid and cancelled.”).

V. CONCLUSION

For the foregoing reasons, the Court should grant this motion.

DATED: August 26, 2015 QUINN EMANUEL URQUHART &SULLIVAN, LLP

B /s/ Victoria F. MaroulisCharles K. VerhoevenKathleen M. SullivanKevin P.B. JohnsonVictoria F. MaroulisMichael T. Zeller

Attorneys for SAMSUNG ELECTRONICS CO.,LTD., SAMSUNG ELECTRONICS AMERICA,INC., and SAMSUNG

TELECOMMUNICATIONS AMERICA, LLC


15-08-26 Samsung Motion for JMOL or Stay

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